Freight News, Sea

Box depots to bear the brunt of inventory slump

[ November 9, 2022   //   Chris Lewis ]

Container depots will bear the brunt of a box surplus well into 2023 in the face of a major slump in orders, says the Container xChange (CxC) online platform. It reports that shippers have slowed ordering and carriers cancelled sailings due to low demand and high inventories.

However, demand will bounce back once these inventories are exhausted, says CxC in its November forecast, although it predicts a severe shortage of depot space next year.

CxC cofounder and chief executive, Christian Roeloffs, said: “There is just not enough depot space to accommodate all the containers. With the further release of container inventory into the market (for example, from the disposal of leasing fleets) there will be added pressure on depots in the coming months. This will be a key challenge for some and a competitive advantage for others in the business, especially in China because of the empty container repositioning there.”

CxC adds that retailers currently have enough inventory in North America and Europe, but once this is exhausted, companies will order again. Demand for shipping capacity will pop back up – possibly not to pandemic extremes but certainly back to the long-term average upward trend.

Tags: Container xChange